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MANAGEMENT
W HAT IS MANAGEMENT ALL ABOUT ? – 1.
1. The organization
 Definition : ~ is a system which operates through human activity.
 Determinative elements of the society, eg.:
cash income, entertainment, producing products, services, etc.
 Theory: organizations are very complex social formations, their links can’t be described with
only one theory.
 Particular theories – different viewpoints, different characteristics :
3 levels
Macro : cooperation among different
Mezzo : structures of the organizations,
Micro : behaviour of the members of the
conflicts
2. The management
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organizations
and influencing factors
organizations,motivation,
Definition : management is about planning, organizing, leading, and controlling the financial-,
physical-, informational-, and human resources.
Management functions
4 areas
Planning: is the process of setting objectives and then
determining the
steps
needed to attain them.
The planning process itself consists of five steps : (1) awarness of the opportunity, (2)
establishment of the objectives, (3) determination and choice of alternative courses of action,
(4) formulation of derivative plans, and (5) budgeting of the plan.
Organizing : is the process of assigning duties to personnel and coordinating employee efforts in
order to ensure maximum efficiency.
The manager must consider both structure and people !
Controlling : every organization needs to control both operations and people. The controlling
process consists of three steps : (1) establishment of standards, (2) comparison of results
against standards, and (3) correction of deviations.
Leadership : is the process of influencing people to direct their efforts toward the achievement of
some particular goal. Managers must be knowledgeable about human behavior, the concept
of leadership, and communication.
3. The Roles of Managers ( Mintzberg )
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Interpersonal roles : to keep the organization running smoothly. As a Figurehead (1) :
manager meets important people, takes customers to lunch, and simply lets people know that
he or she is the key person; As a Leader (2) : the manager is responsible for hiring, training,
counseling, and directing subordinates; As a Liaison (3) : the manager interacts with people at
the same level of the hierarchy as well as with others outside the organization .
 Informational roles : enable the manager to gather and pass on information. As a Monitor (1) :
the manager talks to subordinates and gathers information that is useful in running the
department. As a Disseminator (2) : he or she passes information along to subordinates. As a
Spokesman (3) : the manager provides information to people outside the department.
 Decisional roles : are the ones through which the manager makes things happen. As an
Entrepreneur (1) : who seeks to improve the unit and adapt it to changing conditions. As a
Disturbance Handler (2) : trying to resolve problems before they become serious. As a
Resource Allocator (3) : the manager decides who will get resources and how much they will
receive. As a Negotiator (4) : a role that varies with the level of the organization.
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STRUCTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 2.
Basic characteristics of the organizational structures
Division of labor : dividing work into small components so that the workers become
specialists in their tasks. ( functional, product, geographic – one dimension: functional-line
structure/multi dimensions: divisional, matrix organizations )
 Authority : the right to command.( one line: line structure/ multi lines: functional, matrix )
 Coordination : the synchronization of the human efforts of individuals and groups for the
purpose of attaining organizational efficiency. Coordination tools : Technocratic – planning
system, budgeting; Structural – report s ystem, teams, projects; Employee oriented –
individual/group motivations
2. Organizational Structures
2.1. Line Structure
 Advantage : simple, well arranged, only one boss, reports and orders following the official
way, if the quantity of tasks has changed this structure can be easily modified.
 Disadvantage : the activity of top management is very complex, not flexible, distorbed
information
 Application : at small organizations, in critical situations
 Division of labor: according to the accomplishing tasks, according to the manager’s decision
 Authority : through the official way, centralized decisions
 Coordination : vertically through the official way, with the tools of power
2.2. Staff Structure
Complete the line structure, the goal is to help the managers in their complex tasks— includes
experts on different fields ( eg.: sales, accounting, etc.) without authority.
2.3. Functional-Line Structure
 Advantage : division of labor among top managers -according to professions-high efficiency,
clear regulations, complicated tasks could be accomplished
 Disadvantage : red tape, slow decision making process, decisions are concentrated on the top
of the hierarchy, decrease the ability of accommodation, can not use wide range of products
 Application : stabil environments, a narrow range of products
 Division of labor: according to functions, task regulations according to job descriptions
 Authority : decision making according to functions centralized, highly regulated decisions
 Coordination : vertically through the official way, horizontally on the same level of hierarchy,
strong regulations, technocratic tools
2.4. Divisional Structure
2 faces of Janus : big organization - small organization
 Advantage : division of labor according to functions, big independency, motivation is important,
strategic and operational tasks are seperated
 Disadvantage : paralell existing functional organizations, increased number of staffdecentralization, divisions became selfish-independency
 Application : dynamic environments, a wide range of products
 Division of labor: according to products, customers or regions; strategic leading comes mainly
from the center, but one part of them comes from the divisions.
 Authority : decentralized decisions between the central unit and the divisions, centralized
within the divisions
 Coordination : horizontally hardly among the divisions, technocratic tools
2.5. The Matrix Structure
 Advantage : horizontally functional groups, vertically groups of products or projects, dynamic
and flexible structure, good studying process at problem handlings, mixed structure,
accommodate to the challenges
 Disadvantage : two way leading- conflicts are always there, competition among the managers,
nobody dares to take the responsibility for the decisions
 Application : dynamic environments, conflict management skills within the organization, at
complex innovation claims
 Division of labor: horizontally functional (technical, sales, etc. ) vertically products or projects,
well done conflict management are highly suggested between the two divisions
 Authority : functional and project leaders making the decisions together,
decentralized decisions, decisions are not
highly regulated
 Coordination : horizontally and vertically because of the structure, employee oriented tools
Accommodates to the stabil environment
 Division of labor : exact tasks, experts
 Hierarchy : coordination on top levels only, Official way, regulation
 Loyalty, Obedience ( eg.: manufacturing )
 Concentrated authority
2.7. The Organical Structure
Accommodates to the dynamic environment
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No specialization, no experts
Flexible
Communication and interaction is in the whole organization
Decentralized authority
Functions based on commitment( eg.: Research & Development )
2.8. Patological Structure
Organizations which are not able to became organical, because of the regulations of the
mechanical structure.
( New type of tasks )
2.9. Mintzberg
 Mechanical Bureaucracy : simple tasks, stabil environment, centralized controlling, being
efficient in productivity is the most important
 Professional Bureaucracy :decrease centralization, stabil environment, complicated tasks,
experts needed, independence is required eg.: hospitals, universities
 Enterpreneur Structure : simple, flexible, centralized, experts behind the enterpreneur
 Adhocracy : are founded for certain projects ( problems ), eg.: marketing, R&D
3. Environment, technology and strategy
3.1. The organization & the environment
An organization exists in a certain environment that can be described as follows
 In a broad sense: by the economical procedures, legal regulations, government, technological
development, politics, international relations
 In a narrow sense: by customers, suppliers, competitors, newcomers, substitute product
producers
According to Mr. Thompson & Mr. Duncan the most important environmental dimensions are :
 The Simpleness (few elements only – weak influence) & Complexity (many elements – strong
influence): how the number of the environmental elements influence the organization
 Static ( not too many changes) & Dynamic (several changes) environment
 Uncertainty: we don’t have enough information about the environment
Organizations respond to the environmental changes:
 Adopt the changes – follower attitude
 Initiative attitude
Organizations can also influence the environment by:
 Good connections with the elements of the environment, eg.: organizational alliances
 New employees - consultants
3.2. Technology & Strategy
Connections between technology and organizational structure. W oodward ( 3 groups):
 Unique production – Organical org. structure (decentralized)
 Mass production- Mechanical org. structure (bureaucracy)
 Standardized production - Organical org. Structure (decentralized)
Connections between strategy and organizational structure.
Chandler:
 Strategy determines the structure and the structure has weak influence on strategy.
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CULTURAL CHARACTERISTICS OF THE ORGANIZATIONS – 3.
Organizational Cultures
Definition : the system of accepted values and beliefs by the members of the organization.
2. Components
 Decisions of the founder members: vision, values, norms in terms of employee selection,
profile, etc.
 Mission & Principles: determine the future of the organization, eg.: environmental relations
 Structure of the society: determine the quality of interaction between people
 Norms & Values: expected behavior of the employees & activities
 Preserved stories & symbols: stories from the past eg.: ceremonies, rituals; which belong to
the cultural values of the organization
 Institutional operation: organizational policies, motivation system, authority, communication,
3. Tipologies
3.1.Handy
 Power culture : the ”pater”, who founded the organization, is in the central; he makes all the
decisions, useful at small organizations, eg.: financial crisis
 Role culture : stabil environment, rules & regulations are the most important, bureaucratic
organizations, eg.: mass production
 Task culture : the goal is to solve the tasks, regulations are not too important, matrix
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organizations, eg.: R&D
Personality culture : special organizations eg.: attorney offices
3.2. Quinn
2 dimensions : Margin of movements ( level of flexibility / controlling ), Orientation (
whether the organizations focus on inside or outside of the company )
 Supportive : focus on human relations, inside
 Regulation oriented : focus on regulations and stability,
 Goal oriented : focus on goals, strong regulations, outside
 Innovation oriented : accommodate to the environment, creativity, development
3.3. Schein : organizational cultures according to professions
 Operators : basic activities
 Engineers : experts in technical processes
 Executives : managers
Conflicts : operators-engineers
3.4. Hofstede : cultural differences
 Power distance dimension : boss - subordinates
 Uncertainity-Avoidance dimension : how strong are the regulations eg.: risk or security, hard
work, etc.
 Individualism-Collectivism dimension : I-We
 Masculinity dimension : Feminine : equality -Masculine : man dominates ( US-Japan )
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MOTIVATION – 4.
W hat is motivation?
How to manage subordinates to reach the company’s goals and be satisfied at the same
time
Motivation is concerned with the ”why” of human behavior. W hy do people do things?
The person directs his/her behavior toward important goals ( wishes, desires, etc.).
Unsatisfied needs Goal directed behavior
Need satisfaction
 An unsatisfied need is a starting point in the process of motivation. This cause tension within
the individual, leading the individual to engage in some kind of behavior to satisfy the need,
and thereby reduce the tension.
 If the need couldn’t be satisfied, cause frustration, and aggressive behavior, such as
1. Rational behavior : always blame it on others
2. Regration : always give up trying
3. Complex : always behave the same way, and never reach anything
4. Resignation : always escape from reality, looses faith in life
2. The content theories of motivation
2.1. Maslow’s need theory : holds that an individual strives for need satisfaction at a particular
level. W hen needs at one level basically satisfied, they no longer serve as motivators, and the
individual moves on to the next level of hierarchy.
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The Five Levels
Physiological needs : primary needs, eg.: food, clothing, etc.
Safety needs : individual’s need for security or protection
Social needs : individual’s need for love, sense of belongingness
Esteem needs : the individual needs to feel important, and power and status provide a basis
for this feeling
Self – Actualization needs : to fulfill one’s desire
2.2. Alderfer’s need theory
E- Existence needs -1: are related to survival and safety
R- Relatedness needs – 2: stress interpersonal and social relationships
G- Growth needs – 3: are related to the individual’s desire for personal development
2.3. Herzberg’s two-factor theory
W hen do people feel exceptionally good or bad about their job. W hat kind of factors link to
satisfaction or dissatisfaction ?
 Motivators – some job conditions build high levels of motivation and job satisfaction, such as :
Achievement,
Recognition,
Advancement,
The work itself,
The possibility of personal growth,
Responsibility
 Maintenance factors : don’t build strong motivation, but dissatisfy employees when they are
not present.
Salary,
Supervision,
W orking conditions,
Interpersonal relations,
Company policies, and administrations
2.4. McClelland : achievement motivation theory : based on ”learned” needs
1. Affiliation Need: friendship, love, cooperation
2. Achievement Need: success, new challenge
3. Need of Power: prestige, the desire to influence people
3. The process theories of motivation
3.1. Skinner – Reinforcement theory
considers the use of positive or negative reinforces to motivate or create an environment of
motivation.
Positive : rewarding someone for certain achievements
Negative : stops those consequences which the subordinates don’t like ( disciplines ).
3.2. Theory of Objectives-Management by Objectives ( MbO )
W hat are the goals and thoughts of the subordinates ?
This method typically involves the establishment of objectives to be accomplished by the
subordinate.
3.3. Vroom’s Expectanc y Theory
Individuals will exert work effort to achieve performance which will result in preferred rewards.
The management FOCUS that follows is about rewarding workers in such a way that
increased effort occurs.
Individual effort to perform (tools, resources, skills): results in Level of performance (this effort
will lead to reward): results in Outcomes (Instrinsic reward : eg.: recognition, or Extrinsic
reward: eg.: job security )
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Why is a led company
marketable? - 5.
The leader & the manager
The leader = conductor of an orchestra, creates global concepts and hands them out to
the managers to transform into well-structured tasks
The leader analyzes the logical relations ( if-then rules ), and the manager deals with
arithmetical relations
The leader: what to do?
The manager: how to do?
The charismatic leader
 What makes a charismatic leader is the coherence between his/her acts and thinking. He
supplies a certain power. His/her position is justified by his/her aptitude rather than mere
appointment
 The charismatic leader moves throughout the network to be on time on the right place to make
the needed decision
 At the modern organizations the leader goes after the decisions, not the decisions go after the
leader
 Possessing knowledge is essential to efficiently interact with the network. To be able to make
decisions at all levels of the network the decision maker has to be familiar with every field at a
certain level. And to be able to influence he/she has to have the attributes of the charismatic
leader
2. How does an e-leader make influence?
The leader needs followers ( the managers)
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Leadership: ‘A’ influences ‘B’ to do things that serve B’s interest anyway
Managing: ‘A’ motivates ‘B’ to fulfill the expectations throughout which they both can satisfy
their own needs
3. How does the e-leader create symbols & metaphores
 The changes of the environment are so accelerated that even the weak signals (homályos
jelek ) are received too late for the traditional responses.
 We could prepare ourselves for the surprises by learning, and keeping in shape our ability to
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respond ( reagáló képesség) .
Strong negative signs ( eg. Toothache ) override the positive ( eg.: being in love with
someone ) ones. Strong or familiar signs call more our attention. W e can only focus on one
thing at the same time.
The leader doesn’t define the signs in advance he/she looks for.
He/she creates symbols from the signs
 The leader use the language of the Metaphores – tailored to the actual need . (new concepts
cannot be described with old metaphores). Eg. An elephant-blind people
 The leader is able to see the whole picture, and use the rules of logic- he/she thinks in
metaphores
W hy are routine decisions delegated to the subordinates by the e-leader? - 6.
1. Implicit knowledge
W hy are routine decisions delegated to the subordinates by the e-leader? - 6.
I. Intuition is needed when a new dilemma is there, and looking for the solution. It suddenly
happens. Intuition=picture ( eg.: the first kiss )
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Clue : The leadership is based on a clue, which can’t be put in words, but can be
experienced.
Explanation: The leader explains how he/she got this solution. Rules are not valid for a new
dilemma
W hy are routine decisions delegated to the subordinates by the e-leader? - 6.
II. Facts
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Event : Something happens, which can’t be put in words, but can be experienced. ( eg.: an
explosion)
 Measurement : what is the truth? Truth=measurable? ( eg.: the radiation of the explosion, do I
have 10.000 Ft in the pocket, are you in love?). True/false- Compromised measure. If the truth
is not measurable there are no facts. The more the knowledge is improved, the more uncertain
it is
Why are routine decisions delegated to the subordinates by the e-leader? - 6.
 Leadership is not always based on the improvable facts. The leader is looking for the
connections behind the facts, where the personal knowledge is needed. The leader uses the
facts to support his/her beliefs-decisions. The leader is inseparable from his/her decision.
Rules are not valid for a new dilemma.
W hy are routine decisions delegated to the subordinates by the e-leader? - 6.
III. Skills
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The rules of profession : how well we know our profession, how well we are able to imitate the
master. ( eg.: reading, speaking a language ) It can be put in words, and learned
Action: It can’t be put in words, but can be experienced. ( eg.: reading, speaking a language)
The more you practice the better you be!
 The leaders use their skills for communication to have their decisions accepted
2. Explicit /Implicit knowledge in the decisions
Reflex, routine, original decisions
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The leader faces different kind of dilemmas, where he/she has to decide which-, and what
level of his/her knowledge (explicit, implicit) will be applied
There are 3 types of dilemma:
Reflex decision: we do not think about it, we just do it.- Instinctive actions. Eg.: W C, Paying
out the wages: you will be paid out for your monthly work, buying cigarettes, etc.
2. Routine decision: explicit knowledge- learned rules. Eg.: buying flower for someone’s birthday,
writing a contract, buying a car which satisfies our criterias, production according to the
technological description
3. Original decision: new situation - the leader has to find the new solution- implicit knowledge –
symbols and pictures. Eg.: R&D, divorce
3. Routine decisions
Original decision
leader (he is the coordinator )
Routine decision
Reflex decision
manager (he is the expert)
executor
 Problems:
- Making a routine decision, as an original one
- Focus on simple solutions without understanding the rules of routine
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Treat a new dilemma like another type of an old dilemma
The organization is slow, if each dilemma is handled as unique, and the organization can not
react in time if each dilemma is handled from routine
Why can’t creative communities be effectively led by orders? – 7.
2.-3. How will be the novum accepted?
 Novum: to create new expectations, new connections
 The layman believes that the quality of the output is enough for securing acceptance of the
novum--- unfortunately this is not enough
 The solution of the output is a new knowledge ( a dynamical value ), which is known by the
leaders, but not known by the followers
 Mistake : If the leader wants to convince the follower with professional arguments
1. The EQ leadership
 The output is already given, and it has to be a good quality output
 If the leader wants to convince the follower with IQ ( professional arguments), can cause
inferiority complex, that is why
 The leader has to influence the follower with EQ instead of IQ
 The leader use the EQ ( 3 types: authentic, attractive, threat ) to influence the follower
 Eg. : if the leader describes only the profit of the output, the follower refuses its acceptance. If
the leader threatens the follower: ” we are not able to keep step with the competition” – the
follower will subserve
 If the follower likes the leader’s performance– he/ she is able to identify oneself with the output
 When the leader is able to change the follower’s order of value-the follower interorisate the
output
 The leader with EQ knows exactly that he/she has to influence the emotions of the follower to
be able to sell the product
(The followers are very sensitive for the soft signs)
Why is there a need for extraordinary creators? -8.
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Along which way does the creator think?
The weird idea
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During the problem solving process we are not paying attention to the explanation
If the weird idea is there (result of the intuition) our sense starts to act as an inspector, and
tries to refute it.
 We compare the weird idea with our explicit expectations.
 Although we know that our explicit expectations are not satisfied with it, we do feel that this is
the right solution, because we have satisfied our implicit expectations
 Explanations help to reduce the contradictions between our knowledge and our actions
 There are two possibilities to reduce the contradictions: Either we don’t act against our
knowledge, or we change our knowledge
 The knowledge of the novum’s users are based on learned and experienced patterns
Their knowledge is opposite to the weird idea
The new solution does not fit in
their world
That is why logical explanations are needed!
 We have to convince the novum’users
2. W hat defines the quality of novum?
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There are a lot of so called „”high quality products” ( eg.: Barbie doll, Tamagocchi, Atomic
bomb)- But are these good things?-NO!
High quality should come with the concept of right-we have to make good things in high
quality
 There may be 2 different approaches to quality :
 ”Doing things well”-target oriented,”Producing good things”- value oriented
 Neither the quality nor the human knowledge can be comprehended by its elements ( eg.:
Grandmother’s cake, Mc Donalds hamburger)
 Quality cannot be unpersonal, universal, and objective. Quality always come together with the
experience of the real world
 We are only able to experience the value, and through the value we perceive the quality
 The value of the product is defined purpose rather than its elements
 The value of the output:
- we want something valuable,
- dynamic value: discovering new
- static value: interpretation of the
materials, working out new methods
 Static value ( standardization)
Sometimes you have to accept standards, but that doesn’t mean that standards can be
applied in every situation
 The executors have to accept the expectations of the manager, problem solvers are not bound
by them
 The static value (process) defines the structure
 At the planning process precision is very important
 Strict deadlines, budget
 The process is sensitive to changes and interruptions
 Standardized expectations: you don’t have to make a decision
makes your life very
comfortable standardized needs ( eg.: Ads on TV : certain products you’ll like, certain
products you won’t like )
You loose your freedom, BUT that makes your life easier !
 Human relations should work by default and not by standards
 The problem solver should not smile only because he was trained to, but because he/she has
something to offer
 Dynamic quality
There is always something good in everything, which emerging suddenly without you being
able to forecast or repeat it
 The leader often has to go beyond the static quality to be able to create something new
3. How can be a genios sponsored / supported?
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Foundations
Tenders
Companies
Attila József – Baumgartner Foundation, Mozart – Maecenas: individuals were supported,
not the achievement!
Problems: - Lack of Maecenas,
- Results wanted in advance – what about the genius?
 Moral philosophy: if a company supports a creative community – the company wants to
influence the creators, and use the sponsorship in their own interest. Eg.: MATÁV:
Mindentudás Egyeteme
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Why is the web age trigger a culture change? – 9.
The e- communication
Accelerated world: where nothing is secure
( eg.: workplace, technology, etc.):
when someone leaves the company the „knowledge” goes with him/her.
W e are looking for virtual connections: no time & space barriers! – web interactivity :
„knowledge producer”
we want more and more information, so
 rapidity,
 briefness,
 signs
(-:
)-:
 illustrations, pictures needed!
 Errors of spelling are not too important!
 BUT!!! CONFIDENCE
2. The share in customers
 How can we support the share in customers?
The share in customers replaces the share in market, as we created a basis for trust for our
current customers.
 Our customers know what they can expect from us ( quality, quantity)
similarly to our
competitors, who also have their own regular customers
 Consequence: we do not have to look out for new customers, BUT! We have to learn how to
sell other products to our regular customers; as it is the simplest and cheapest solution to
survive.
 We have to influence the customers: Marketing: 4P! Eg.: Tesco, Cora
3. W hat is the problem with out-of-date notions?
 If we want to satisfy the expectations clients’, we have to learn how to change the culture
 Changing a culture is not easy, we have to mix the existing culture with the new e-culture
 If we want to sell a novelty then, we have to show the customers its essence, BUT!
 A novelty cannot be described by the old, out-of-date notions – SO!
 We have to create new metaphores and pictures, otherwise our company is not able to
survive.
Why can’t the knowledge user company become a knowledge creator ? – 10.
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Provincial & Civilized companies
I. Profit-oriented company: accepts static values- (provincial) successful companies
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Fiscal reasoning dominates : positive financial balance
The target of development, and expected results are clearly outlined
The company wants to satisfy the customer’s explicit needs
W ell structured, centralized task division
 The static value (process) defines the structure
 At the planning process precision is very important
 Strict deadlines, budget
 The process is sensitive to changes and interruptions
II. Value - oriented company: accepts dynamic values: civilized companies
 Owners reasoning: the value of the knowledge is not defined by a positive balance, but the
market price of a company
 The problem is circumscribable, but the solution is not
 The stress is on creating new solutions, that increase the value of the company
 Dynamic value (the response) determines the structure
 New solutions quickly turn into static value, which brings a fast change in organizational
structure, and production organization
 Individual concepts are supported
 There are a number of ad hoc teams working on the same issue.
2. How should a genius be used and how not?
 Normally you would think in a convergent way: there is only one logical solution
 Lateral thinking is different
 Lateral thinking - we change our reference system to be able to understand the weird idea
 The new reference system shows things from different aspects Eg.: jokes-punchlines: shows
the order
The genious:
 Able to create extraordinary ideas, solutions
 At the age of 2-3 – creative games
 At the age of 5 – looking for coherence behind things which are incoherent
 They are rigid to change
 Lots of friends around them – sometimes they lead a loose life
 They are not good at IQ tests, and well structured tasks
3. Decision making or Creativity?
a.) Decision making process play a bigger role:
 at the profit oriented (provincial) companies, where
 they have mostly well – structured tasks ( only 1 solution!), and the goals are
 to use the knowledge as effectively as possible.
b.) Creativity plays a bigger role:
 at the value oriented (civilized) companies, where
 they have mostly bad– structured tasks ( more than 1 solution!), and the goals are
 to create new values, novums
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Strategic analysis methods – 11.
The BCG portfolio: used to evaluate the SBUs
The first step in this approach is to identify the various divisions, product lines, and so forth
that can be considered a ”business”. W hen identified, these are referred to as strategic
business units (SBUs) and have the following characteristics: They have :a distinct mission,
their own competitors, they are a single business or collection of related businesses, they
can be planned independently from the other businesses of the organization
 The BCG Matrix helps the organization to allocate resources among the various SBUs
 The BCG matrix illustrates 2 business indicators of great strategic importance:
 The vertical indicator is the market growth rate: refers to the annual rate of growth of the
market in which the product, division, or product is located
 The horizontal indicator: relative market share: illustrates an SBUs market share compared to
that of the most successful of the competition
Star
Question mark
 Stars: an SBU with high share of a high – growth market is considered a star. Eg.: building &
investing. Stars need a great deal of financial resources, because of their rapid growth. W hen
growth slows down, they become cash cows.
 Cash cows: an SBU that has a high share of a low-growth market is labeled a cash cow. Eg.:
banks. They produce a great amount of cash for the organization, and do not require a great
amount of financial resources for growth and expansion
 Question marks: when an SBU has a low share of a high-growth market, the organization
must decide whether to spend more financial resources to build it into a star or to phase it or
eliminate it all together
 Cash traps: when an SBU has a low share of a low-growth market, it may generate enough
cash to maintain itself or may drain money from the other SBUs.
 2. MCKinsey portfolio (GE matrix)
 The GE matrix illustrates 2 business indicators of great strategic importance:
 The vertical indicator : competitiveness: shows the organization position on the market, eg.:
market share, customer loyality, innovation, new products, the size of the company, etc.
 The horizontal indicator: industrial sector attraction, eg.: market size, technology, competition,
labour-market supply, etc.
 Investment: a strong strategic position : the most perspective group of products. A good
strategy is to develop them
 Selectivity: an average strategic position: the strategy has to be selective, eg.: selective

expansion
Harvest, elimination: a weak strategic position: the strategic goal is the elimination
3. SW OT Analysis
A complex analysis about the external and internal environment
S - Strengths,
W – W eaknesses,
O – Opportunities,
T - Threats
Strengths
Opportunities
Relations:
 Strengths - Opportunities: embrace the opportunity
 Strengths - Threats: avoid threats
 Weaknesses - Opportunities: development, or elimination
 Weaknesses - Threats: withdrawal
Strategy types and levels – 12.



The levels of strategic plannings
Organizational:
Main task: to create complex strategy for the divisions:
- reconciliation of the long-, and short term profit options
- recommend more than one direction ( if it’s necessary)
- try to reduce the economic and political risks ( make them acceptable)
- main part of its activities can be realized out of the organization
Main function: good resource allocation among the divisions
II. Divisional: (portfolios, missions, targets, actions within the SBU’s)

Shows the future of the SBU’s ( Strategic Business Units):
- independent decision making process focuses on the following areas: R&D
Research & Development), production and sales
- market competitors can be well defined
-
(
its performance can be well measured
III. Functional: inside the divisions

Marketing, technology, production, finance, investment, logistic and human strategy
2. Ansoff : Product – Market Matrix
 It indicates that an organization can grow in a variety of ways by concentrating on present or
new products, and on present or new customers
 Market Penetration Strategies: these organizational strategies focus on improving the position
of the organization’s present products with its present customers. Eg.: A charity seeks ways to
increase contributions from present contributors
 Market Development Strategies: following this strategy, an organization would seek to find
new customers for its present products. Eg.: A manufacturer of industrial products may decide
to develop products for entrance into the consumer market
 Product Development Strategies: the organization in effect seeks new things to do. With this
particular strategy the new products developed would be directed to present customers.Eg.: A
college may develop graduate programs for minority students
 Diversification: an organization diversifies when it seeks new products for customers it is not
serving at present. Eg.: A cigarette manufacturer diversifies into real estate development
3. Porter : corporate strategies
 Cost leadership: implies that the firm will outstrip its competition by being the low-cost
producer. The firm will build efficient-scale facilities, pursue cost-control policies, avoid
marginal customers, and generally be cost conscious in all areas of the business
the firm
will emphasize efficiency and productivity.
 Differentiation: involves the firm creating products that are perceived to be unique. The
perception of differentiation can be based upon a variety of factors, such as brand image,
product features, customer service or dealer network .
the firm will emphasize
flexible response to changing customer preferences and perceptions.
 Focus: involves achieving either cost leadership or differentiation, or both, in a particular
segment of the market. Rather than competing throughout the market, the firm focuses on one
segment. Eg.: Porter Paint attempts to serve the needs of professional painter rather than doit-yourself customer. Thus, the focus strategy implies a tradeoff between market share and
profitability.
Models of the environment – 13.
1. The PEST matrix – gives an overall picture of the environment
2. Porter: The Five – Forces Model : Competitive Analysis
 The rationale behind this model is that industry profitability is not determined by what the
product looks like, nor whether it embodies high or low technology: it s determined by the
structure of the industry
 Firms can influence the five forces through the strategies they persue
 Competitive rivalry: this is the most obvious form of competition: Head to head rivalry

between firms making similar products and selling them in the same market.
Competitive forces arising from rivals’ jockeying for a better market position and a
competitive advantage
The following conditions can cause rivalry:
W hen demand for the product is growing slowly
 As the number of competitors increases and as they become more equal in size and capability
 When competitors are tempted by industry conditions to use price cuts or other competitive
weapons to boost unit volume
 When it costs more to get out of the business than to stay in and compete
 When competitors’ products and services are so similar that customers incur low costs in
switching from one brand to another
2. Threat of entry : competitive forces coming from the threat of entry of new rivals
The most common barriers to entry are:
 The existence of considerable cost benefits to be gained from experience
 Brand preferences, and customer loyalty
 Capital requirements
 Access to distribution channels
 Government actions and policies
3. Threat of substitutes: competitive forces coming from the market attempts of outsiders to win
buyers over to their products
A substitute is something that meets the same needs as the product produced in the industry.
If the substitute becomes more attractive in terms of price, performance, or both – customers
move away from the firms in the industry.
4. Power of buyers: competitive forces arising from buyers’ exercise of bargaining. Buyers are
powerful in the following situations:
 When customers are few in number and they purchase in large quantities
 When the item being bought is not an important input
 When it is economically feasible for customers to purchase the input from several suppliers
rather than one
5. Power of suppliers: competitive forces arising from suppliers’ exercise of bargaining. Buyers
are powerful where:
 The input is, in one way or another, important to the buyer
 The supplier industry is dominated by a few large producers
 Suppliers’ respective products are unique
3. How the Internet Influences Industry Structure - Porter : The Five – Forces Model
 The Internet is an extremely important new technology, which changes everything, rendering
all the old rules about companies and competition obsolete
 The Internet has created also some new industries such as on-line auctions and digital market
places
 Whether an industry is new or old, its structural attractiveness is determined by five underlying
forces of competition:
 Competitive rivalry
2. Threat of entry
3. Threat of substitutes
4. Power of buyers
5. Power of suppliers

Competitive rivalry:
(-) Reduces differences among competitors as offerings are difficult to keep proprietary
(-) Migrates competition to price
(-) W idens the geographic market, increasing the number of competitors
(-) Lowers variable cost relative to fixed cost, increasing pressures for price discounting
2. Threat of entry
(-) Reduces barriers to entry such as the need for a sales force, access to channels, and physical
assets- anything that Internet technology eliminates or makes easier to do reduces barriers to
entry
(-) Internet applications are difficult to keep proprietary from new entrants
(-) A flood of new entrants has come into many industries
3. Threat of substitutes
(+) By making the overall industry more efficient, the Internet can expand the size of the market
(-) The proliferation of Internet approaches creates new substitution threats
4. Power of buyers
(+) Eliminates powerful channels or improves bargaining power over traditional channels
(-) Shifts bargaining power to end consumers
(-) Reduces switching costs
5. Power of suppliers
(+/-) Procurement using the Internet tends to raise bargaining power over suppliers, though it can
also give suppliers access to more customers
(-) The Internet provides a channel for suppliers to reach the end users, reducing the leverage of
intervening companies
(-) Internet procurement and digital markets tend to give all companies equal access to suppliers,
and gravitate procurement to standardized products that reduce differentiation
(-) Reduces barriers to entry and the proliferation of competitors downstream shifts power to
suppliers
 Cost and price advantages can be achieved in two ways:
 Operational Effectiveness: doing the same things your competitors do, but doing better. Eg.:
better technologies, better trained people – ”Best Practice”. Once a company establishes new
best practice, its rivals tend to copy it quickly. Best practice competition eventually leads to
competitive convergence, with many companies doing the same things in the same ways
2. Strategic Positioning: as it becomes harder to sustain operational advantages, strategic
positioning becomes all the more important . The only way to generate higher levels of
economic value is to offer unique value. Eg. : a new logistical method
Consequences:
 Just applying the Internet technology doesn’t mean advantage in the competition
 We have to examine how the Internet technology can complete our company strategy
 The industrial sector of Internet should integrate with the traditional industrial sectors.
Outsourcing methods are not recommended
The Balanced Scorecard – 14.


The BSC model
A new approach to strategic management was developed in the early 1990's by Drs. Robert
Kaplan (Harvard Business School) and David Norton. They named this s ystem the
'balanced scorecard'. Recognizing some of the weaknesses and vagueness of previous
management approaches, the balanced scorecard approach provides a clear prescription
as to what companies should measure in order to 'balance' the financial perspective.
 The balanced scorecard is a management system (not only a measurement system) that
enables organizations to clarify their vision and strategy and translate them into action. It
provides feedback around both the internal business processes and external outcomes in
order to continuously improve strategic performance and results. W hen fully deployed, the
balanced scorecard transforms strategic planning from an academic exercise into the nerve
center of an enterprise.
 The balanced scorecard suggests that we view the organization from four perspectives, and to
develop metrics, collect data and analyze it relative to each of these perspectives:
 The Learning and Growth Perspective
 The Business Process Perspective
 The Customer Perspective
 The Financial Perspective
 The Learning and Growth Perspective
This perspective includes employee training and corporate cultural attitudes related to
both individual and corporate self-improvement. In a knowledge-worker organization,
people -- the only repository of knowledge -- are the main resource. In the current
climate of rapid technological change, it is becoming necessary for knowledge workers
to be in a continuous learning mode.
 The Business Process Perspective
This perspective refers to internal business processes. Metrics based on this perspective
allow the managers to know how well their business is running, and whether its
products and services conform to customer requirements (the mission). These metrics
have to be carefully designed by those who know these processes most intimately; with
our unique missions these are not something that can be developed by outside
consultants.
 The Customer Perspective
Recent management philosophy has shown an increasing realization of the importance of
customer focus and customer satisfaction in any business. These are leading
indicators: if customers are not satisfied, they will eventually find other suppliers that
will meet their needs. Poor performance from this perspective is thus a leading
indicator of future decline, even though the current financial picture may look good.
 The Financial Perspective
Timely and accurate funding data will always be a priority, and managers will do whatever
necessary to provide it. In fact, often there is more than enough handling and processing of
financial data. W ith the implementation of a corporate database, it is hoped that more of the
processing can be centralized and automated.
 There is perhaps a need to include additional financial-related data, such as risk assessment
and cost-benefit data, in this category.
2. The BSC hierarchy
 Financial perspective: expectations of the shareholders, measure: Return on investment and
economic value added
 Customer perspective: expectations of the customers, measure: Satisfaction, retention,
market, and account share
 Internal business processes: in order to achieve the goals of customer orientation and
subsequent financial ramifications, the processes measure: Quality, response time, cost, and
new product introductions
 Learning and growth perspective: based on the skills of the employees, measure: Employee
satisfaction and information system availability
All perspectives must relate to the strategic vision, and each perspective relates to the others
through the central vision driving the company. As tactics are implemented, the data collected
in the BSC reflects the company's progress toward achieving the goals delineated by the
strategic vision. The financial perspective assumes prime importance in nearly all companies
and will be considered first.

3. Cause and effect
Result and Performance indicators
 Result indicators (post-indicators): do not show the way how to reach a certain result, and not
even good for indicating the temporary results of the strategy
 Performance indicators ( foreshow-indicators): show how to reach a better level of
performance – only for short-term! But do not reflect the way of the final result.
Strategic alternatives.- 14.
1. Porter : corporate strategies
 Cost leadership: implies that the firm will outstrip its competition by being the low-cost


producer. The firm will build efficient-scale facilities, pursue cost-control policies, avoid
marginal customers, and generally be cost conscious in all areas of the business
the firm will emphasize efficienc y and productivity.
Differentiation: involves the firm creating products that are perceived to be unique. The
perception of differentiation can be based upon a variety of factors, such as brand image,
product features, customer service or dealer network .
the firm will emphasize
flexible response to changing customer preferences and perceptions.
Focus: involves achieving either cost leadership or differentiation, or both, in a particular
segment of the market. Rather than competing throughout the market, the firm focuses on
one segment. Eg.: Porter Paint attempts to serve the needs of professional painter rather
than do-it-yourself customer. Thus, the focus strategy implies a tradeoff between market
share and profitability.
2. Ansoff : Product – Market Matrix
 It indicates that an organization can grow in a variety of ways by concentrating on present or
new products, and on present or new customers
 Market Penetration Strategies: these organizational strategies focus on improving the position
of the organization’s present products with its present customers. Eg.: A charity seeks ways to
increase contributions from present contributors
 Market Development Strategies: following this strategy, an organization would seek to find
new customers for its present products. Eg.: A manufacturer of industrial products may decide
to develop products for entrance into the consumer market
 Product Development Strategies: the organization in effect seeks new things to do. With this
particular strategy the new products developed would be directed to present customers.Eg.: A
college may develop graduate programs for minority students
 Diversification: an organization diversifies when it seeks new products for customers it is not
serving at present. Eg.: A cigarette mabufacturer diversifies into real estate development
3. The growth strategies of firms
 Volume expansion: firms manufacture, sell or distribute more of their product or service to
existing customers. Advantage: low risk, managable, continious learning. Disadvantage: lack
of needed knowledge – wrong decisions
 Buying up: Advantage: fast, buying market shares and experience. Disadvantage: high price,
wrong decision – high risk, the right firm is not always reachable
 Strategic alliance: the firms either buys or creates other functions. Advantage: cheaper than
taking over, access to the knowledge of the market, useful if buying up is not working well.
Disadvantage: difficulties in leading, and managing
 Syndicate: involves the firm in new industries, through merger. Advantage: like strategic
alliance, plus: better motivation system, stronger relations. Disadvantage: like strategic
alliance
What is HRM all about? – 15.




Each company needs the combination of the following 3 factors to operate:
M1-Money
M2-Man
M3-Manufacturing
Common features of these factors:



a certain level of capacity and efficiency,
they are available in the market,
the price is determined by the relation of supply/demand
Special features of M2:





Does not run out: permanent resource
Not storable: the capacity which is not used within a certain time frame is lost! It can’t be
reserved for next time!
Innovative: always able to renew, creates new solutions
Makes decisions: resigns from position
Is not owned by the company: although it is not part of the equity, it can increase the value
of the company (capacity, performance )
2. Definition: Human resource management is the function performed in organizations that
facilitate the most effective use of people (employees) to achieve organizational and individual
goals.



3. The Diagnostic Model for HRM
This model in HRM is a framework that can be used to help managers focus on a set of
relevant factors. There are 3 main factors included in the model:
people;
the internal and external environment; and
the organisation itself.
External Environmental forces
Economic Conditions Composition of the labor force Government requirements and regulations
The union
 Results : can be influenced by the HRM activities. A significant reason for the eventual
success of any HRM activity is that the organization’s employees are the best qualified and
are performing jobs that suit their needs, skills, and abilities. Having the right staff means the
future of the company. The goal is to make the staff think, feel and behave positively
toward work and the place of work.
Satisfaction. Good reputation makes the company
easier to recruit new employees.
There are other factors which could be important for the organization, such as: safety and
health, stress handling, etc.
By studying the diagnostic model you should see that in order to work effectively, a number of
HRM activities must be efficiently practiced. E.g.: to encourage individuals to use their abilities:
it may not be sufficient to only have a properly analyzed job. A sound performance evaluation,
equitable benefits and services, and an attractive work schedule may also be needed.
HRM activities are all related to each other and have a combined effect on people. The
objectives of the HRM functions must be accomplished in order for the organization to remain
competitive and to survive in the environment.
 Employees – Scope of activities: the basic function of the HRM activity is to create harmony
between employees and scope of activities.
Some differences between employee performance affecting HRM programs are due to the
differences in abilities (mechanical, motor coordination, mental or creative skills) and
motivation toward work and the place of work (working hard, being on time). Generally it is
said that the performance of an organization is brought about by the abilities and
motivation of the employees.
Each position has general requirements eg.: level of education, and special requirements like
experience on a special field. Requirements need to be rewarded with competitive salary and
other benefits, that motivate the employee.
 HRM Activities
-Planning: Two steps: 1. To make a forecast, based on the company’s business strategy needs,
about the quantity and quality of the human resources 2. After the environmental forecast,
define the right tasks
-Job analysis: The process of defining a job in terms of tasks or behaviors and specifying the
education, training, and responsibilities needed to perform the task successfully
-Recruitment and selection: The goal is to find the right person for the right task.
Sources of recruits: two sources of applicants can be used: internal ( present employees), and
external (those not presently affiliated with the organization). External recruitment methods:
tests, interviews.
-Performance evaluation is a system set up by the organization to regulary and systematically
evaluate employee performance.
-
Career planning and development: internal and external trainings help the employees to reach
their dream positions
Benefits and services are a part of the rewards of employment that reinforce loyal service to
the employer. Major benefits and service programs include payment for time not worked,
insurance, pension funds and services
Labor relations: the continuos relationship between a defined group of employees
(represented by a union or association) and an employer. The relationship includes the
negotiation of a written contract concerning payment, working hours and other conditions of
employment.
 Internal environmental influences: involve characteristics and factors that are found within the
organization.
-
Organizational procedures: how the company will change its activities /
resources / training
the
human
Rules of organization: organizational structures
(centralized, decentralized)
coordination of the human resources and the scope of
activities
Strategy: indicates what an organization’s key executives hope to accomplish in the long
run.
(Human strategy!)
W ork group: labor relations
-
-
External environmental influences: involve characteristics and factors that are found external
to the organization.
Economic Conditions: the general procedures of macroeconom y influence the financial
stability of the micro organizations. Also influence the human resources policy.
( good economical conditions
more benefits for the employees, poor economical conditions
no benefits for the employees)
-
The labor market: the supply and demand situations influence the HRM activities.
Government requirements and regulations: the government regulates and influences some
aspects of personnel more directly than others (employees’ and employers’ rights).
Hungary: Code of Labour.
The union: the presence of a union affects most aspects of HRM- recruiting, selection,
performance evaluation, promotion, compensation, and benefits among others.
Job Analysis and Design – 16.

The goal, the methods and the results of the job analysis
1. a. Definitions

Job: the basic element of an organization.
In a narrow sense: consists of duties performed by an individual
In a broad sense: /out of duties/ responsibilities, relations, the place of work and the polic y

Job analysis: the process of defining a job in terms of tasks or behaviors and specifying the
education, training, and responsibilities needed to perform the job successfully.
The job analysis process /6/:


Examine the total organization and the fit of each job
Determine how job analysis information will be used
3. Select jobs to be analyzed
4. Collect data by using acceptable job analysis techniques
5. Prepare job description
6. Prepare job specification
1.b. Job analysis: methods of data collection:
2 main groups:


Observation: direct ~ is used for job that require manual, standardized, and short-job cycle
activities. The job analyst must observe a representative sample of individuals performing
these jobs
Functional job analysis
- based on observation
- focuses on the purpose of the job and the tasks within the organization
- jobs are concerned with data, people and things (quantitatively rated!)
- mental resources are used to describe data; interpersonal resources are used with people;
physical resources are applied to people
 Workday analysis
- based on observation – but not constantly
- sampling method
- focuses on the workflow, and its elements
- similar to the task inventory,
- professional analyst needed!
II.
 Job Incumbent Diary/Log
- it’s a recording by job incumbents of job duties, frequency of the duties and when the duties
were accomplished
- this technique requires the job incumbent to keep a diary/log on a daily basis
- comparisons on a daily, weekly or monthly basis can be made
-
the diary/log is useful when attempting to analyze jobs that are difficult to observe, such as
those performed by engineers, scientists and senior executives

Questionnaires:
- the least costly method for collecting information
-
It is an effective way to collect a large amount of information in a short period of time
It includes specific, mainly standardized, questions about the job, job requirements, working
conditions and equipment
- The ~ should be short and simple
- Explain what the ~ is being used for
- Test the ~ before using it
- Disadvantage: no time for customized questions, the result can be false
 Task inventory: a coordinated and aggregated series of work elements to produce an output
- It is easy to prepare, if we have a good questionnaire
- Fast evaluation – by computers
- Results can be used: job evaluation, training plans
- Disadvantage: takes a long time to make an inventory about the tasks
 Interview
- the most widely used job analysis data collection technique
- they permit the job analyst to talk face to face with job incumbents
- the job incumbent can ask questions of the job analyst : feedback!
- usually a structured set of questions will be used in interviews
- major problem: inaccurate information may be collected
2. Job design
Def.: ~ is the procedure that identifies the tasks and functions of the job
Methods
 Specialization: complex work procedures can be divided into small parts, that do not require
specialized knowledge and can be easily described
-Problems: high fluctuation, dissatisfaction at the workplace (monotonity!)
 Job Enlargement: a group of two or more jobs that have similar job duties
- reverse of the specialization
- tried to reduce monotonity – was not successful
 Rotation: within certain timeframes the employee has to change his/her job
-
reduce monotonity, BUT!
do not increase efficiency
 Job Enrichment: a method of designing a job so that employees can satisfy needs while
performing the job
Key job core dimensions:
-
Skill variety
Task identity
Task significance
Autonom y
Feedback
3. Job evaluation’s methods
Def.: ~ is the formal process by which the relative worth of various jobs in the organization is
determined for pay purposes.
3.1. Global comparison methods
 Ranking: the system used primarily in smaller, simpler organizations. Instead of analyzing the
full complexity of jobs by evaluating part jobs, the job-ranking method has the evaluator rank
order whole jobs from the simplest to the most challenging
 Classification: classification or grading system groups a set of jobs together into a grade
classification. Then these sets of jobs are ranked in levels of difficulty or sophistication
3.2. Factor comparison methods
 Point system: it is the most frequently used because it is more sophisticated than ranking and
classification systems, but it is relatively eas y to use. The point system requires evaluators to
quantify the value of the elements of a job.
On the basis of the job descriptions or interviews with job occupants, points are assigned to
the degree of various compensable factors. An advantage of the point system is that it can be
easily interpreted and explained to the employees. On the other hand, it is time-consuming
process to develop a point system.
 Factor comparison: it permits the job evaluation process to be done on a factor by factor
basis. It is differs from the point method in that jobs are evaluated or compared against a
”benchmark” of key points.
Five universal job factors used to compare jobs are:





Responsibilities – the money, human resource, records and supervisor responsibilities of
the job
Skills
Physical efforts – sitting, standing, lifting, etc.
Mental efforts – the intelligence, problem solving, reasoning, etc.
W orking conditions – the environmental factors such as noise, ventillation, hours, heat, etc.
The results of the 4 job evaluation methods can be used at the HRM activities such as:
planning, career planning, benefits and service programs.
Human Resource Planning– 17.

Strategy and polic y within the framework for management action
Mission: W hat is the organization for? W here is it going? It is general and visionary.
Strategy: The overriding mission is then continuously implemented by developing a programme of
initiatives to define and achieve the organization’s objectives
Policy: The overall mission and strategy are guided by a series of policies to channel decision
and action, shaping the organization and providing the direction that is needed
Procedures: procedures are more familiar to personnel managers than to most management
specialists as they form the substance of much employee relations activity, but in our action
framework they have the more general meaning of being the drills that implement the policy,
so that a policy decision to advertise all vacancies within the organization before external
advertising begins is implemented by a procedure to specify who does what, in what order,
when and with what authorisation, or other trigger to action
Planning: Strategy, polic y and procedures can all be co-ordinated and moved into action by
planning. Not only does each stage benefit from planning, but a planning approach can ensure
that all three are thought through and put into operation together
Practice: The final element is what actually happens. No organization has a procedure for
everything, and no procedure is so comprehensive as to rule out the need for interpretation
and judgement.
Practice is a mixture of implemented procedures , ad hoc decisions, reaction to policy and the
ebb and flow of interaction between the organization and its environment. The effectiveness of
a polic y can only be determined by the practice that ensues.
 What is human resource strategy? : A part of the organizational strategy. Human resource
strategy involves a central philosophy of the way that people in the organization are managed
and the translation of this into personnel policies and practices.
 Elements:
1. Putting together the goals of human resource strategy ( quantity-quality needs)
2. W orking out the action plans
3. Defining the activities (replacement, career planning, trainings) which are needed for the
chosen strategy, and the way of the controlling methods
 Human policy: is a framework within which other people operate using their own discretion
and making their own decision. Human policy is declared! W hy managers try to use
statements?
1. Clarification
2. Reducing dependence on individuals
3. Producing consistent management behaviour
4. Knowing where we stand
5. Responding to legal and other external pressure
As a policy is as good as the practice it produces!
To develop human strategy the methods of business strategy is used. Eg.: brainstorming,
patterning, SW OT, STEP analyses
The content of the strategical human resource planning
Strategic management decisions
Strategic HR decisions
2. a. Types of staff number requirements
If adequate or shortage
If surplus
-
Basic staff number requirement
- Layoff
-
Reserve staff number requirement
- Retirement
HR planning
-------------------------------------------Total staff number requirement
- Shortage: overtime, recruitment
2.b Influencing factors
1. Task Identification: the complexity of the job structure; type of service or product; scheduling
of the tasks, contribution proportions.
2. W ork process: the level of the practice (routine), cooperation with other systems
3. Technology: machines, tools
4. The person: qualification, performance of the coworkers, job specification
5. The environment: company’s targets, rules, development tendencies, worktime
3. Employment forecasting techniques

Determining techniques: employees have to accomplish certain tasks within a certain time
frame
1.a. Analytic requirements determination
- Index number technique: we match the volume of the tasks to the time needed for
execution (objective)
- W orkplace technique: it is not dependant of the volume of the tasks; set plan for scope of
activities
1.b. Summing requirements determination
- Plan for scope of activities: civil service area: set plan for scope of activities for different
periods of time
2. Stochastical techniques: based on a mathematical procedure in which predictions of the
dependent variables are made through knowledge factors known as independent variables.
Results must always be completed by forecasts! Types: - Regression analysis,- Correlation
analysis, - Exponential finishing
Problems: past staff number records are often incorrectly regarded as number requirement
data
Changes in production are often mistaken for changes in work volume
The method requires too many figures from the past years
3. Econometrical technique: we examine statistic figures from the econom y to be able to forecast
the development in the future (use of computers). This technique is suitable to make medium
and long term forecasts.
4. Simulation techniques : we model different kinds of systems with a set of different variables.
(e.g.: standing in line)
5. Estimate techniques
5.a. Simple estimate technique: the area manager will forecast the employment needs based
on his/her decision, the result is based on the manager’s judgement (subjective),
5.b. Expert-estimate technique: an ”expert” will forecast the employment needs primarily
based on his/her decision, or expert group!
-Delphi techniques: intensive questioning of each expert, through a series of questionnaires to
obtain data that can be used to make a reliable forecast
6. Creating new jobs: if the volume of the task, and the certain time frame are not preciesly
outlined
6.a. Task analysis
- make a list of tasks
- structure the tasks
6.b. Task synthesis
- arrange the tasks according to quantity and quality
Define the scope of activities for executives and managers
6.c. Jobs independent of staff number
- In cases none of the above is applicable: a) the number of employees are determined by
business policy rather than actual need; b) only one person is needed
Selection – 18.



Goals, criteria, problems
Selection is the process to choose the best available person or persons from a list of
applicants, considering current market conditions
This definition emphasizes the effectiveness of selection, BUT! decisions taken to chose
from the selection must also be efficient. The secondary purpose of selecting is to improve
the proportion of successful employees chosen from the applicant list at the least expense.
 The
basic objective of selection is to obtain the employees most likely to meet the
organization’s standards of performance. The employees’ satisfaction and skills improvement
prospects are also sought in this regard.
 Selection criteria: it will be difficult to select the most appropriate procedure and approach, and
it will be difficult to realize the selection process. Selection criteria are normally presented in
the form of a person specification representing the ideal candidate. There is a wide range of
procedures for this purpose.
Lewis (1985) suggests that selection criteria can be understood based on the following 3 aspects:


Organizational criteria: are those attributes that an organization considers valuable in its
employees and that affect judgement about a candidate’s potential to be successful within
an organization ( e.g.: flexibility)
Functional/department criteria: between the generality of organizational criteria and the
preciseness of job criteria there are departmental criteria
3. Individual job criteria: contained in job descriptions and person specifications are derived from
the process of job analysis
2. Choosing selection methods: Testing
Selection methods: application forms, resumé, references, tests, interviews
 Tests are to support selection decisions. Questions have been raised as to relevance of the
tests to the job applied for and the possibility of unfair discrimination and bias.
 Critical features of test use:
Reliability of a test is the degree to which the test measures consistently whatever it is
intended to measure
Use and interpretation: tests need to be used and interpreted by trained or qualified testers.
Context of test: test scores need to be evaluated in the context of other information about
individuals
 Types of tests
1. Aptitude tests: these are tests that measure specific abilities or aptitudes, such as spatial
abilities, perceptual abilities, verbal ability, numerical ability, motor ability ( manual dexterity),
and so on. There is some debate over the way that general intelligence and special abilities
are related
1.a. Special aptitude tests measure an individual’s potential, attainment or achievement, tests
measureskills that have been already required
2. Intelligence tests: sometimes called mental ability tests, are designed to give an indication
of overall mental capacity. A variety of questions are included in such tests, including
vocabulary, analogies, similarities, opposites, arithmetic, number extension and general
information.
3. On the job test: consist of the applicants doing a practical task, or mechanical test, or
simulation
4. Personality tests: the least reliable of the employment tests are those instruments that
attempt to measure a person’s personality or temperament. The tests based on the person’s
honesty and reliability. Ps ychiatrists needed for the tests! The problem with the use of
personality tests is that they rely on an individual’s willingness to be honest, as socially
acceptable answer or the one best in terms of the job are often easy to pick out.
3. The interview
 An interview is a goal oriented interpersonal communication between an interviewer and an
interviewee
 Employment selection interviews eg.: provide general information to potential applicants for a
specific job opening, determine whether a particular applicant is the most suitable candidate
for the job
 Interview strategy
1. Frank and friendly strategy: here the interviewer is concerned to establish and maintain the
rapport. This is done partly in the belief that if interviewees do not feel threatened, and are
relaxed, they will be more forthcoming in the information that they offer. The potential
advantage that the interviewees will leave with a favourable impression of the company.
2. Problem-solving strategy: a variation of the frank and friendly strategy is the problemsolving approach. It is the method of presenting the candidate with a hypothetical problem
and evaluating his or her answer. These are sometimes called situational interviews. The
questionsa asked are derived from the job description and candidates are required to
imagine themselves as the job holder and describe what they would do in a variety of
hypothetical situations. This method is most applicable to testing elementary knowledge.
3. Stress strategy: in the stress approach the interviewer become aggressive, disparages the
candidates, puts them on the defensive or disconcerts them by strange behaviour. The idea
was used by some business organizations on the premise that executive life was so stressful,
so a simulation of the stress would determine whether or not the candidate could cope. The
advantage of the method is that it may demonstrate a necessary strength or a disqualifying
weakness that would not be apparent through other methods.
The disadvantages are that evaluating the behaviour under stress is problematical, and those
who are not selected will think badly of the employer.
 Number of interviews and interviewers
The decision about the number of the interviewers are based on the traditions, and the chosen
strategy.
1. The individual interview: gives the greatest chance of establishing rapport, developing mutual
trust and the most efficient deployment of time in the face-to-face encounter, as each
participant has to compete with only one other speaker. The disadvantages lie in the
dependence the organization places on the judgement of one of its representatives, and the
ritual element is largely missing. The individual interview is very popular in the selection of
blue-collar staff.
2. Group interview: two or more interviewers.
a. Two interviewers are still able to establish a
friendly atmosphere, but if there are
more
than two:
b. Panel interview : this method has the
specious appeal of sharing judgement and
may appear to be a way of saving time in
interviewing as all panel members are
operating at once. They are not having a
conversation with the candidates, they
are sitting in judgement upon them and
assessing the evidence they are able to present
in response to their requests

The selection interview sequence
1. Preparation: we assume that the preliminaries of job analysis, recruitment and shortlisting
are complete and the interview is now to take place. The first step in preparation is for the
interviewers to brief themselves. They will collect and study a job description or similar
details of the post to be filled, a personal specification or statement of required
competencies and the application forms or CV of the candidates. If there are several people
to be interviewed the interview timetable needs greater planning than it usually receives.
2. Interview structure
Stage
Objectives
Activities
Opening
To put the candidate at
Greet candidate by name
easy, develop rapport
Introduce yourself
and set the scene
Explain interview purpose
Outline how purpose will be
achieved
Obtain candidate assent to
outline
Middle
To collect & provide information
Asking questions within the
structure that makes sense to
the candidate, such as
biographical, areas of the
application form, or competencies
identified for the job; Listening
Answering questions
Closing
To close the interview and
Summerize interview, Check
confirm future action
candidate has no more questions
Indicate what happen next and
when
Performance evaluation - 19.


Performance evaluation: is a system set up by the organization to regulary and
systematically evaluate employee performance
Performance evaluation serves several purposes:
- Development purposes: it can determine which employees need more training
- Reward purposes: it helps the organization decide who should receive a raise and
promotion
- Motivational purposes : the presence of an evaluation program has a motivational effect: it
encourages initiatives, develops a sense of responsibility, and stimulates effort to perform
better
- Legal compliance: it serves as a legally defensible reason for making promotion, transfer,
reward, and discharge decision
- Personnel and employment planning purposes: it serves as a valuable input to skills
inventories and personnel planning
- Compensation: it provides information that can be used to determine what to pay and what
will serve as an equitable monetary package
- Communications purposes: evaluation is a basis for an ongoing discussion between superior
and subordinate about job related matters. Through interaction, the parties get to know each
other better
- HRM research purposes: it can be used to validate selection tools, such as a test program
There are further purposes, such as:
- According to Fletcher & W illiams:
1. Evaluation of employees’ work
2. Evaluation of production in order to advance improvement

According to Randell:
1. Salary and wage adjustments
2. Promotion consideration
3. Improvement of performances
Performance evaluation types
2.a. Dimensions
 What is appraised?
Personality
Behaviour/Performance Achievement of
goals
Knowledge of the job
Accomplishment
Turnover
Physical force
Following orders
Output
Eyes-hand coordination
Reporting problems
Product quality
Qualifications
Maintanance
W aste
Business knowledge
To make notes
Accidents
Ambition
Keep the rules
Repairs
Social skills
W ork attendance
Served customers
Reliability
Submitting proposals
Number of satisfied
Loyality
Non smoking
customers
Morality
Creativity
Leadership skills
2.b. The 360 grade performance evaluation method
W ho contributes to the appraisal process?
 Self appraisal
 Immediate manager
 Manager’s manager
 Subordinates!
 Co-workers!
 Customers!
Advantages:
 Feedback from many sources –more realistic
 Helps in the team building
 Develop not just the performance of the individiual, but the organization as well
 Provide information for the career plan
 Dicrease the discrimination risk
 Develop a better customer relation
Disadvantages:
 It takes a lot of time
 Many resources needed eg.: finacial-, human resources, etc.
The evaluation can be:
 Written – also with computer
 Oral
 Open
 Closed: no name
3. Key to a successful evaluation s ystem
1. Clear objectives: what are the goals of the evaluation? The employees have to have a clear
picture about the goals!
2. Commitment of the management: management should participate! Evaluation forms should
remain at the departments!
3. Openess, participation: the system should be open to providing more information about the
employee him/herself, so the employee can accept these decisions easier.
4.Acceptance of the evaluation criteria: the involvement of both analysts and testees in the
identification of evaluation criteria
5. Training: analysts need training in how to evaluate and how to conduct evaluation
interviews
6. Administrative effectiveness: form filling should be kept at a minimum!
7. Follow-up: work plans that are agreed by analyst and testee need to be monitored
8. Culture & Flexibility: the system should go along with the organizational culture
Labor relations – 20.

Labor relations
Def.: ~ is a continuos relationship between a defined group of employees ( represented by a
union or association) and an employer.
The relationship includes the negotiation of a written contract concerning pay, hours,
conflicts, and other conditions of employment and the interpretation and administration of
this contract over its period of coverage.
 Primary level: labor relations between the social partners
 Secondary level: labor relations among the social partners and the government
2. The basic clash of interests
 Conflicts between the 2 major parties:
employer – employees
solution!
labor relations help to reduce the contradictions, and try to find a
 Negotiation: mutual interest!
- The employees can represent their interests
-
The employer can accept the strategic cooperation of the human resources
3. Participation & Collective bargaining
3.1. Participation
~ with employees as a collective is governed by procedures related to consultation and
negotiation with trade unions and workers’ representatives.
 3 basic principals:
1. Autonom y: the representative is independent of the management and of the electors as well
2. Cooperation: the representative should have a positive approch toward cooperation
3. Confidence: the parties have to trust in each other to be able to come to a solution
 Result: the employees can influence the operation of the organization, and the management’s
decisions as well.
3.2. Collective bargaining
~ is a process by which the representatives of the organization (the employer) meet and attempt
to work out the contract with representatives of the workers (the employees).
 The content of ~:
1. Conditions of employment (working hours, holidays, trainings, etc.)
2. Income bracket ( wage/salary; other personal allowances)
3. Define the values, norms, principals and regulations between the parties
 Result: Collective Agreement
Achievement need
Teljesítménymotiváció
Need of Power
Reinforcement
Theory
Hatalmi motiváció
Expectancy Theory
Elvárás elmélet
Carismatic leader
Karizmatikus vezető
Follower
Követő
Weak signals
Homályos jelek
Ability to respond
Reagáló képesség
Strong signals
Explicit knowledge
Erős jelek
Szavakba önthető
tudás
Implicit knowledge
Hallgatólagos tudás
Creative Community
Alkotóműhely
The layman
Inferiority complex
A laikus
Kissebbségi
komplexus
Authentic
Hiteles
Subserve
Behódol
Self-identification
Azonosul
Vállalkozói forma
Genius
Zseni
Adhocracy
Adhokrácia
Margin of movements
Mozgástér
Maecenas
The share in
customers
Mecénás
Vevőben való
részesedés
Orientation
Power distance
dimension
UncertainityAvoidance dimension
Masculinity
dimension
Orientáció
Out-of-date
Elavult
Hatalmi távolság
Bizonytalanság
kerülés
Notion
Reference system
Fogalom
Vonatkoztatási
rendszer
Punchline
Csattanó
Coherence
Összefüggés
To lead a loose life
Züllött életet él
Market growth share
Relative market
share
Piaci növekedés
Relatív piaci
részesedés
Cash cow
Fejős tehén
Growth needs
Férfias-nőies
Elismerés iránti
szükségletek
Önmegvalósítási
szükségletek
Létezésre irányuló
szükségletek
Kapcsolatokra
irányuló szükségletek
Fejlődésre irányuló
szükségletek
Cash traps
Döglött kutyák
Affiliation need
Kapcsolatmotiváció
Competitiveness
Versenyképesség
Figurehead
Képviselő
Leader
Vezető
Liaison
Monitor
Kapcsolattartó
Idegközpont (
információ gyűjtő )
Disseminator
Információelosztó
Spokesman
Szóvivő
Entrepreneur
Vállalkozó
Disturbance Handler
Zavarelhárító
Resource Allocator
Erőforráselosztó
Negotiator
Tárgyaló
Division of labor
Munkamegosztás
Authority
Hatáskör
Coordination
Koordináció
Application
Mechanical
Bureucracy
Professional
Bureucracy
Entrepreneur
Structure
Alkalmazás
Esteem needs
Self-Actualization
needs
Existence needs
Relatedness
Gépi Bürokrácia
Szakmai Bürokrácia
Megerősítés elmélet
Elimination
Felszámolás
Ranking
Rangsorolás
Harvest
Aratás
Classification
Osztályozás
Investment
Beruházás
Point system
Reconsiliation
Összhang
Market penetration
Piaci terjeszkedés
Factor comparison
Pontozásos módszer
Tényező
összehasonlító
módszer
Cost leadership
Költségdiktáló
Ebb and flow
Apály és dagály
Differentiation
Megkülönböztető
To ensue
Követni
Focus
Consistent
Kiegyensúlyozott
Threat of substitutes
Összpontosító
Helyettesítők
fenyegetése
Shortage
Hiány
Cause and effect
Ok-okozat
Surplus
Többlet
Post-indicator
Utólagos jelzőszám
Előre mutató
jelzőszám
Pontos rendelés
teljesítés
Folyamatok átfutási
ideje
Reserve
Tartalék
Index number
Mutató szám
Workplace
Munkahely
Summing
Összegző
Stochastical
Sztochasztikus
Econometrical
Ökonometriai
Simulation
Szimuláció
Becslési módszerek
Mennyiségtől
független munkakör
tervezés
Kiválasztási
kritériumok
Foreshow-indicator
Dependant service
Process time
Loyalty of the
customers
Fogyasztói hűség
Not storable
Nem raktározható
Equity
Saját tőke
Estimate techniques
Scope of activities
Munkakör
Jobs independent of
staff number
Job analysis
Munkakör elemzés
Recruitment
Toborzás
Selection
Performance
evaluation
Kiválasztás
Teljesítmény
értékelés
Career planning
Karrier tervezés
Code of Labour
Munka Törvénykönyv
The union
Szakszervezet
Sampling method
Mintavételes módszer
Diary/Log
Önfelmérés
Task inventory
Feladat leltár
Job design
Munkakör kialakítás
Job enlargement
Munkakör bővítés
Job enrichment
Munkakör gazdagítás
Selection criteria
Aptitude test
Frank and friendly
strategy
Alkalmassági teszt
Subordinate
Beosztott
Peers
Munkatársak
Self-appraisal
Önértékelés
Assessment centers
Development of
appraisal criteria
Evaluation based on
job analysis
Értékelő központok
Őszinte, nyílt stratégia
Értékelési kritériumok
Munkakörelemzésre
támaszkodó értékelés